'We Want Help, But

Papua New Guinea, which is rich in natural resources and manpower, lacks the capital and the expertise to exploit them. The Chief Minister and other ministers frankly admit they need outside help, but say that the outside help in the form of in vestment and know-how, must be on PNG’s terms.

The country is well-placed to dic tate its terms. The lessons, often bitter, learned by the many new inde pendent countries since World War U, provide useful guidelines for the development of her policies. Some steps have already been taken.

Mr Somare recently went to Aus tralia to address the Institute of Directors on his country’s foreign investment policy. He left those captains of industry in no doubt that his people will share, in one way or another, foreign investment benefits.

Investors will have to be aware of local customs and traditions, of pro perty rights which can differ from those elsewhere and realise that, in the eyes of New Guineans, return on investment is not as important as some other results of business activity.

For example, a business could pro vide services to the members of one’s own kin group, or it could make new goods available in a region.

The PNG custom of holding regu lar pig exchanges was based on

demonstrating mutual obligations be tween groups and on sharing evenly.

Those exchanges reinforced tra ditional values. Those objectives, as seen by the PNG people, were worth while, regardless of straight business profit.

Profit thus becomes, not an end in itself, but rather a necessity for staying in business.

If PNG people saw the role of business enterprises like that then it was logical to expect those ideas to have a real effect on their thinking on foreign investment in PNG, Mr Somare argued.

One consequence was that PNG investment priorities would differ from those which would be deter mined by purely profit considerations.

A pig freezer might be preferred to highly profitable popcorn factories.

The PNG evaluation of investment proposals would be guided by the benefits the country expected from them in terms of her national objec tives. Investment in underdeveloped districts might be preferred to invest ment in the already highly-developed towns.

The recently set-up National Invest ment and Development Authority will be the central body for co ordinating dealings between an in vestor and the PNG Government.

As a central agency it should make life easier for foreign companies which, at present, had to deal with as many as a dozen different govern ment units. The authority would also make it easier for the government to follow a consistent policy towards all potential investors, and to enforce laws and arguments once investors went into business.

The NIDA will also work towards setting PNG priorities for investment.

In some fields, such as petroleum and natural gas, PNG would actively seek foreign investment because only over seas companies had the capital and organised skills to develop the re sources. But in other areas, such as road transport and agriculture, foreign investment would be actively discouraged and the field reserved for New Guineans.

Any major investor will be ex pected not only to employ the maxi mum number of New Guineans, but

vill also be required to provide train ng to increase the number of skilled itizens.

Mr Somare believes PNG cannot fford to allow major companies in *NG to acquire a trained work force imply by increasing wage rates and ittracting workers from other indus ries. That would have a disastrous ffect on efforts to control inflation, t would also place an impossible train on the limited manpower re ources available to the public service, vhich could not compete at that evel. Investors would be required o train their own staff. If they did ;et workers from other firms, they night still be required to train ad litional people.

Newly-trained staff could then join he national labour market. In that vay every investment project would nake a positive contribution to the reation of a trained work force.

Investors will also be required to >uy supplies from local sources, whenever they are available at com petitive prices, as, for instance, from he PNG highlands which can pro luce almost all vegetables.

Major investment projects create many service businesses. A good example is the town of Bulolo where practically every business was owned by the area’s major industry, Com monwealth New Guinea Timbers.

That sort of thing would not be allowed in future, Mr Somare warned. All service businesses would have to be in local hands.

A most important basic principle was that PNG’s rich natural resources belonged to the PNG people. The government would make sure those resources were exploited in a way which contributed to PNG’s own goals and needs. The people, through their government, would choose how and when those resources were de veloped.

The government would also make sure that resource development did not create a small privileged class of New Guineans. The benefits must go to the masses. For that reason, there would be increased emphasis on taxa tion of resource projects so that the benefits could be redistributed to the people through government projects.

There would also be increasing em

phasis on government ownership in partnership with foreign corporations.

Where there were windfall profits beyond the control of either the gov ernment or the company, the lion’s share would be kept in PNG. While it was recognised that foreign com panies often took risks in resource development projects, it was not in tended to remove all possibility of profit. But foreign companies should be satisfied with a reasonable return on investments, and should not claim absolute rights to gigantic profits which were really produced by PNG’s earth and water.

In secondary industry, PNG wanted investors who would help to set up in dustries which were needed to achieve the country’s development aims. It would look for manufacturing indus tries which would process the country’s agricultural products so that a greater share of the final value would stay in PNG.

However, there were limits to PNG’s desire to attract manufactur ing industry. PNG would look care fully at the costs and benefits 9f any proposals. The government did not

Ivestors Wanted

it to create industrial employment its own sake.

Tie government had adopted a eral policy of incomes stability, did not want a reduction in the I standard of living of people in towns. Similarly, the national it-point improvement plan called a greater equality of incomes. 1 greater equality of services be en the urban and rural areas.

'Change Ideas',

Australians Told

Australian manufacturers and ex ters needed to gear themselves change in their trading relations i Papua New Guinea as that ntry looked forward to indepen ce. That was the theme of an Pess by Mr C. B. Brown, Aust an Trade Commissioner in Port resby, to a Sydney seminar on ie with PNG and the Pacif.c nds.

Uso taking part in the seminar e Mr W. T. McCabe, Trade nmissioner, Suva, and Mr Henry nines, managing director of nry Cumines Pty Ltd, island nts, who spoke on the role the nt could play in developing trade.

At Brown said new consumer ups were emerging in PNG. In ie products the country could be ne more self-sufficient and less ant on exports. There were huge 'elopment projects in train or ng studied at which Australian nufacturers could look as possible pliers.

Tiose projects included two copper isibilities —Ok Tedi and Weipa— Purari River hydro-electricity erne and several timber under ings.

Vlr Brown said that among the >ple there were four main groups o could be looked on as con ners: (1) New Guineans in urban itres; (2) Expatriates; (3) New means earning income from icultural products; and (4) Emer g indigenous people not previously ked on as a consumer market. \ustralia could not afford to rest past success. There was a lot of )dwill in PNG for Australia. Other mtries would be competing in the iG market; Australia would have

to continue to provide the service as in the past, and provide the best export prices. There was a need for individuals, or individual companies and organisations, to visit PNG to assess the demand, and see how their products could be fitted into the trading pattern.

Mr Brown warned there were some fields in which Australia could not compete, or had found competition very strong. These included the car market and electricity generating set markets. Yet in the timber industry, the Japanese had been told to go to Australia to look at sawmills because they were better than anything Japan had in Papua New Guinea.

Speaking on export opportunities

in the Pacific Islands, Mr McCabe listed New Caledonia, the New Hebrides, the Solomon Islands and Fiji as the best prospects. Both Fiji and Western Samoa offered induce ments for investment. The Solomons bought most of their goods from Australia, and it was an area where Australia should keep her fences mended.

There had been considerable eco nomic growth in the New Hebrides.

New hotels going up would help to develop the tourist industry. French

Polynesia offered possibilities for cargo sent by air, as shipping was something of a problem at present for Australian suppliers. Mr McCabe said he hoped soon to appoint a trade correspondent in Papeete.